William Hague has warned the Israelis and Palestinians that the prospect of a two-state solution to the Middle East conflict is slipping away and that the region faces a bleak future if the latest US-sponsored push for talks is not capitalised on.

Speaking at the end of a two-day visit to Israel and the Occupied Palestinian Territories, the Foreign Secretary conceded that despite four visits to the region in just two months by the US Secretary of State John Kerry there was not yet any substantial progress between the two sides.

“I don’t think we’re a position to say that necessary compromises have already been made, but minds are being concentrated and my advice to all concerned is that unless there is bold leadership to make the most of this opportunity then we face a bleak situation in the Middle East – a truly bleak situation.”

While some influential figures on both sides have expressed optimism that a breakthrough can be found, there has also been a high level of scepticism over whether Mr Kerry’s latest efforts will bear fruit. The Palestinians are especially disenchanted, a point recognised by Mr Kerry – who is also in the region – when he raised the issue of settlement building in the West Bank with the Israeli Prime Minister Benjamin Netanyahu during yesterday.

Describing leaders from both sides as being “intensively engaged” in the discussions, Mr Hague called on them to grasp the latest diplomatic push, warning that it could be the last time the international community invests so much energy and time in the problem.

“It’s very important for this opportunity to be seized by all concerned. It is a moment of opportunity that will not easily recur in terms of the United States putting in tremendous energy into trying to re-start negotiations… There isn’t going to be a moment in American diplomacy [like this again]… so it is very important in weeks, not months, to make the most of this opportunity,” Mr Hague said. “We’re getting nearer now to everyone having to decide whether they’re going to be really serious about this. The moment is quite close.

“It is vital that we now have the bold, decisive leadership to allow this to succeed. I think that the consequences of it not succeeding – for both Israelis and Palestinians – would be very severe. There is a real urgency. The two-state solution is slipping away – it doesn’t have much longer to go. We never like to say that it’s the last attempt at anything – but we’re getting near…”

Despite the renewed international effort to restart the talks between the two sides, who have not met directly since 2010, there appears at this stage to suggest that the two sides are even getting to point where they are even prepared to sit down together.

Asked whether there was a Plan B, should the latest initiative fail, Mr Hague said: “I don’t think it’s helpful to speculate publicly about Plan Bs – except to say there isn’t any Plan B that comes anywhere near to Plan A.”

There are formidable obstacles in the way of any final agreement, not least the status of Jerusalem, which both sides claim as their capital, and the right of refugees to return to any future Palestinian state.

The international community supports a two-state solution largely based on United Nations Resolution 242, passed in the aftermath of the 1967 Six Day War, which ordered a return to borders that were in place before the conflict. The wording of the resolution requires Israel to withdraw from all occupied territories, but it is widely accepted that land swaps would be part of any deal.

Israel is insistent that any agreement takes account of its security, although there are members of the Israeli cabinet who publicly argue against the existence of a Palestinian state.